Hinkley Point C and the UK Construction Industry: What You Need to Know

After an initial delay following the formation of Theresa May's government, the £18 billion project to build Britain's first new nuclear power station for a generation has been given the go-ahead.

We look at what this decision means for construction job prospects and whether it will increase recruitment opportunities.

Background to Hinkley Point C

The construction of Hinkley Point C has been a long time coming, with plans set out for the Somerset plant as far back as eight years ago.

Hinkley Point C will be critical in the government's push to a low carbon energy supply future and a new era of nuclear power in the UK.

The UK currently has eight nuclear power stations, all of which are expected to close by 2030. Construction at Hinkley is expected to provide 7% of Britain's electricity needs for 60 years.

Funding for the scheme has primarily come from French firm EDF, while a third will also be provided by China General Nuclear Power Company (CGN). The latter has plans to build its own nuclear power stations in Bradwell and Sizewell.

Changes to the original agreement

The delay after EDF approved the Final Investment Decision at the end of July was so the new government could review all proposals.

Following this review, there have been two changes. The government will have powers to prevent any potential sale of EDF shares before construction is completed and can also intervene in any sale of stake when Hinkley is operational.

Hinkley unleashes a long overdue new wave of investment in nuclear engineering in the UK, creating 26,000 jobs and apprenticeships and providing a huge boost to the economy.

The second change centres around reformation of wider legal framework that governs future foreign investment in British critical infrastructure.

In order to guarantee that significant shares cannot be sold without consent, the government will also take a special share, or 'golden share' in all future nuclear new build projects in the UK.

The purpose of this isn't to give a financial share to the government; instead, it is so that there is power to veto any potential changes in ownership.

The Office for Nuclear Regulation (ONR) will also require notice from any developers of nuclear sites if there are changes to ownership. As a result, the government will be able to direct ONR action in order to protect national security in the event of a change in ownership.

Finally, the government will alter its approach to ownership of critical infrastructure in the UK so that national security is protected by scrutinising the full implications of foreign ownership.

Significantly, this new deal means that the government can intervene at any time there are concerns about the safety of either any part of the reactor, or construction.

This project will create thousands of quality jobs and apprenticeships and bring much needed investment to the south west.

Impact on the construction industry

Despite the fact that opinions on the long term success of Hinkley Point C are mixed, approval for the project must be good news for the construction industry.
As well as providing 900 full time jobs, there will be thousands of vacancies throughout the construction period, including in engineering and for apprentices.

Secretary of State for Business, Energy & Industrial Strategy, Greg Clark, described the approval of Hinkley Point C as a "huge boost to the economy," and something he believes will benefit business throughout the country.

He said: "Hinkley unleashes a long overdue new wave of investment in nuclear engineering in the UK, creating 26,000 jobs and apprenticeships and providing a huge boost to the economy, not only in the south west, but in every part of the country through the supply chain of firms, big and small, that will benefit from the investment."

With government approval received, it is imperative that any further delays are avoided and the power station is built on time and budget.

The major trade unions in the country welcomed the news, with Unite, the TUC and GMB all agreeing it is good news for future recruitment.

The TUC's General Secretary Frances O'Grady said: "We are pleased ministers have ended the uncertainty over Hinkley Point. This project will create thousands of quality jobs and apprenticeships and bring much needed investment to the south west."

Unite's National Officer for Energy, Kevin Coyne, believes the go-ahead will contribute to an 'economic renaissance' and ensure the country's supply chains are busy.

"It means the lights will remain on in the UK in the decades ahead and it heralds an economic renaissance for the West Country, with the accompanying creation of thousands of skilled jobs and the positive ripple effects to the supply chain across the UK."

Benefits for the whole country

This project is expected to not only benefit the south west, but industry in the rest of the country.

He welcomed the injection to industry throughout the country, especially after the recent uncertainty.

"The project will lead to use of material from across UK industries including steel from Wales, and much needed foreign investment in the south west, particularly during this period of uncertainty."

The north east is another area that will benefit according to Anthony Broadhead, Energy Director at Jackson Hogg - recruitment specialists based in the region.

He explains why the likes of Engineers in the north east are attractive to helping the UK meet its nuclear power targets.

Attracting the amount of expertise required to undertake such projects is a mammoth task and organisations will have to be proactive in ensuring they are doing what they can to prepare.

"There is a real opportunity for our region in exporting skills to support the new nuclear power plant at Hinkley Point. There are expert professional and skilled engineers working in our region, as well as consultancies, manufacturing and subcontract engineering companies that make up part of the global nuclear supply chain.

"The drive for companies in the energy sector to diversify and look beyond their traditional customer base has already brought new skills and technologies to other low carbon sources of energy. Combined with the sensitivities of national energy security, this could make north east engineers very attractive to the developers of Hinkley Point C."

NOF Energy's Chief Executive echoed the opinion that is project is important for the supply chain in the UK, with many able to transfer skills for nuclear projects such as this.

He said: "Nuclear forms an important part of a balanced energy mix and this decision should bring some much needed certainty to the sector and a step towards meeting the country's future power requirements.

"It will also be a boost for the UK supply chain, which includes NOF Energy members that are experienced in the nuclear sector or have transferable products, services and skills that can be applied to projects such as Hinkley Point."

Will the skills shortage pose a problem?

It is an oft-mentioned issue with construction, but the skills shortage is still here and apparent in the construction industry.

Construction at Hinkley Point will create 26,000 workers and it is reasonable to worry that the skills gap may mean filling these isn't going to be plain sailing.

Jeremy Blackburn at RICS says that almost half a million people were lost by the construction industry during the recession and worse still the 'knowledge cliff' expected when those in the workforce already eventually retire will make things worse.

With the skills shortage in infrastructure at its highest level for two decades, he has urged the government to avoid any more delays, and instead press on with construction.

Jeremy said: "With government approval received, it is imperative that any further delays are avoided and the power station is built on time and budget."

How to guarantee construction in the long term

The project will make sure that targets on local employment will be adhered to and one recruiter believes engineers in the oil & gas industry will make the move to nuclear in time for the Hinkley Point development.

Matthew Sykes, Power & Nuclear Manager at Spencer Ogden, said that although there are entities from overseas involved, "the project as a whole will have strict targets on local employment it has to adhere to.

The project will lead to use of material from across UK industries including steel from Wales, and much needed foreign investment in the south west, particularly during this period of uncertainty.

"Due to the current downturn in the oil & gas market, I believe we may see many of the engineers previously working in this industry make the move over to nuclear."

Matthew thinks that the media coverage being given to nuclear energy through projects such as Hinkley will help to increase the number of students looking to pursue careers in the sector, with Engineering being one of the chief areas.

It is a way to help with the skills shortage, though Matthew also underlined the importance of being proactive to make sure the correctly skilled people are available.

He said: "Attracting the amount of expertise required to undertake such projects is a mammoth task and organisations will have to be proactive in ensuring they are doing what they can to prepare."

In conclusion

There's no doubt that Hinkley Point C is a huge undertaking for the construction industry, given some of the issues that the sector currently faces.

However, a landmark development like this is a huge positive for the industry and the opportunities it will provide is genuinely exciting for construction.

The key now is to be in the best possible position for the start of work on the development.

Written by John Train

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